Smuggling iPads from U.S. to China May Be “Game Over”

Almost since the debut of the original iPhone in 2007, entrepreneurs have been making quick money by scarfing up as much of Apple’s coveted devices as possible and shipping them back to where they came from: China, where they sell for nearly double -- but those gold rush days may be over with the new iPad.

Reuters is reporting that the curious method by which many iPads make a return to China where they’re sold for big bucks may be coming to an end thanks to U.S.-based shipping agents on the lookout for Apple products and Chinese border agents who are now collecting a 10 percent import duty on electronics.

In the past, students and others looking to make quick $20 or $30 would line up outside an Apple Store on launch day, buy the maximum number of devices -- only two -- and hand them off to begin their travel back to where they were made in the first place, China, to be sold on the black market for upwards of $1,000 the following day, thanks to insatiable demand for Apple’s product there.

But the times, they are a-changin’. “Two small shipping companies that ship to China, BIZ Express and Global Courier Services, said they now refuse iPad shipments,” the report reveals, with BIZ posting a notice on its website this month saying: "Our clearing warehouses have stopped receiving iPad in accordance with a recent customs authority notification."

The crunch is also being felt at the other end of the shipping chain, with the new iPad “among 20 taxable goods that should be declared by travelers” -- which is hitting the wallets of those here in the U.S. as well as in China.

“An electronics dealer in Oakland, California, said he struggled to break even this year, a far cry from previous iPad releases when he shipped upwards of 1,000 tablets and pocketed profits of $50 to $100 per device sent to his buyer in Hong Kong,” the report explains. The dealer sent 250 new iPads to China through FedEx at a cost of $110 each within hours of them being available in the U.S., but notes that the additional expense is definitely biting into profits.

"This whole game is over," the dealer complained. "There's an overabundance of supply. The market's flooded."

The dealer blames Apple’s more efficient and wide-reaching product launches for his lower profit margin. "Apple has gotten so big that they can flood the market,” the dealer explains. “Before they released it, they probably had been making them for six months and had them sitting in a warehouse. Now they are selling it in Asia and Australia, and it's out 16 hours before us.”